Chesapeake fined $3.2 million for West Virginia water violations

U.S. federal regulators on Thursday said oil and gas company Chesapeake Energy Corp will pay a civil penalty of $3.2 million to settle Clean Water Act violations in West Virginia where it drills in the Marcellus Shale.

Chesapeake will also pay an estimated $6.5 million to restore streams and wetlands. The U.S. oil and gas company allegedly dumped rocks, sand and dirt into wetlands while building drill sites and roads, according to the U.S. Environmental Protection Agency and the U.S. Department of Justice.

Companies using hydraulic fracturing and horizontal drilling construct drilling pads for rigs by clearing land that is then covered by crushed rock. Roads also need to be built to accommodate truck traffic to and from drilling sites.

The $3.2 million penalty, one of the largest of its kind ever levied by the federal government, is for violations of the Clean Water Act (CWA), which prohibits the filling or damming of wetlands, rivers, streams, and other U.S. waters without a federal permit, the regulators said.

"Chesapeake Appalachia LLC has reached a key milestone in the settlement process to resolve federal and state claims relating to surface construction activities that occurred in West Virginia prior to November 2010," the company said in a statement.

The settlement, which required court approval, also resolves alleged violations of state law brought by West Virginia's Department of Environmental Protection.

In December 2012, the Oklahoma City, Oklahoma company pleaded guilty to three violations of the Clean Water Act related to natural gas drilling in Wetzel County, at one of the sites subject to this latest settlement.

Chesapeake was sentenced to pay a $600,000 penalty to the federal government for discharging crushed stone and gravel into Blake Fork, a local stream, to create a roadway to improve access to a drilling site. The company has already fully restored the damage done to the site.